Accelerating Digital Innovation in Europe
by Henna Virkkunen, MEP
This blog by Henna Virkkunen MEP was written to accompany the IIEA Panel Discussion on Digital Innovation in Europe, which was organised as part of the IIEA’s Europe’s Digital Future project. As part of this project, which is supported by Google, a year-long programme of events and research is exploring what the concept of digital sovereignty means, and what future it might herald for the EU and for small, open economies like Ireland.
The views expressed here are those of the author.
The COVID-19 crisis has accelerated digitalisation, as more and more people's work, studies and everyday lives have become digital. What is even more remarkable is that a significant part of this change will become permanent. As such, the EU and its Member States must not attempt to roll back the clock. We must make the most of these changes. Accelerating the digital economy is going to be a key factor in recovering from the crisis and in securing European competitiveness.
As a legislator, I am always assessing regulation to see how much it encourages innovation. Studies show that bringing down digital barriers in the EU could promote major economic growth. There are still major obstacles for businesses in the European Union as we still don’t have a real single digital market yet. A common digital single market is critical to help European technology businesses and start-ups to compete against global digital players.
It is crucial that our legislation is designed in a way that promotes rather than hinders innovation. Laws regulating digital services and markets should be holistic, technology neutral and future proof. We must avoid a situation where legislation would impose a different set of rules for digital actors, which could hinder their growth opportunities. Regulating digital technologies is challenging because the technology is developing at a rapid rate and our decision-making progresses at a much slower pace. It often takes years of negotiating on a piece of regulation before it comes into force. Therefore, we should always have a very long-term approach and a technology neutral approach, when we are setting digital rules. We must also ensure that regulation is innovation friendly and that it encourages new ideas, innovations and investments in Europe.
Nowadays, it is also increasingly important that we promote openness, human rights and protect people's privacy and rights in the online world because the internet is a major part of our everyday life. It is crucial that the same rules and values which apply in the real world should also apply online. Of course, this sounds simple but it is often more complex - because we often see practices online that could not happen in the offline world.
The new digital services act is an example of regulation that seeks to promote these goals. It includes measures to promote freedom of speech and human rights online. This includes the increased responsibility of large social media companies to remove illegal content, to ensure new ways to challenge the moderation decisions of online platforms and to improve access to data for researchers. These are examples of how we can promote democracy and freedom of speech online while also tackling the illegal content and illegal products circulating online.
The role of investment and the recovery package will be critical to support innovation in Europe. At least 20 percent of the Recovery and Resilience package should be used to promote digitalisation and it is vital that we meet this commitment. Critical investments include high-speed modern telecommunications infrastructures such as 5G, channelling research and development, funding into new digital services, investing in cyber security and improving citizens' digital literacy. There is also a lot of potential for digitalisation in our SMEs and this is an area where we should really boost our investment. The role of infrastructure investment should not be underestimated. This is where the EU, through, for example, the Digital Europe programme and the Connecting Europe facility, can bring a significant European added value, but only if the goals are ambitious enough.
There are also a number of challenges that can be identified. There are bottlenecks for digital innovation that we need to overcome to maintain Europe’s competitive advantage. Unfortunately, in my opinion the EU does not intend to deploy sufficient investment in some areas in the new Multiannual Financial Framework. A significant worry is that the recovery package will lead to investments that may create national added value, without creating European added value.
There should have been more funding for cross-border digital infrastructure, innovations and investment that benefit the whole continent. A greater cross-border focus would make sure that the projects bring true EU added value. There should also have been more funding for the Horizon Europe programme because it is the most important programme we have for research and innovations. The other big challenge is the lack of digital skills. To address this we need more investments at all levels – including the local, regional, Member State and European levels. Another problem is that less than 20% of workers in the IT sector are women. This lack of gender diversity impacts women's employment opportunities but is also a massive waste of potential that negatively impacts the content and accessibility of digital services.
In conclusion, we should and could boost digital innovation in Europe if we focus on these priorities. I would particularly underline the role of research and development investments; ensuring access to markets through regulation that is innovation friendly; and ensuring we have access to talented people by investing in digital skills. These are the areas we must prioritise to accelerate digital innovation in Europe.
This blog is part of a three part series accompanying the IIEA Panel Discussion on Digital Innovation in Europe. The other blogs can be read by clicking on the hyperlinks below: